SIMA calls for united approach by textile value chain to manage raw material crisis

It has urged the textile mills to extend full support to the downstream sectors by shouldering the increase in cotton price to the maximum possible extent -

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May 12, 2022 Ravi Sam, chairman of Southern India Mills Association (SIMA), has appealed to all stakeholders in the textile value chain to stand united and adopt a win-win strategy to mitigate the grave crisis of high raw material prices.

Some segments of the value chain were seeking short-term policy decisions such as ban or quantitative restrictions on cotton and yarn exports.

"Any negative step or short-sighted policy would cause irreparable damage to the highly capital intensive spinning sector that is already saddled with 35% of spinning machines that are more than 15 years old and it might force the downstream sectors to become import dependent," he said.

The spot cotton prices of Gujarat Shankar-6 variety that prevailed at ₹ 76,600 per candy during the beginning of March was now sold at ₹ 99,000. The cotton yarn price (40s Red label combed compact hosiery yarn) was at ₹ 411 a kg earlier and was now ₹ 481 a kg.

To produce the 40s RL yarn, spinning mills incurred ₹ 502 a kg with zero profit as against the current price level of ₹ 481 a kg.


The SIMA had urged the textile mills to extend full support to the downstream sectors by shouldering the increase in cotton price to the maximum possible extent.

Indian spinners so far contracted over 10 lakh bales of cotton for import, after the government withdrew the import duty. Cotton prices might soften when the imported cotton and domestic summer cotton were available.

The industry should unitedly appeal to the Government to extend the period of import duty removal beyond September 30.

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